THE launch of a venture capital fund aimed at the region’s small and medium-sized businesses has been delayed.

Plans to pump £140m of public sector cash into venture capital investment and business lending could be put back by more than a year.

News of the delay came as the Northwest Development Agency said it would provide £15m of interim finance to keep things ticking over while details of the longer-term scheme are ironed out by the Government.

The transitional funding should last until April next year, by which time it is hoped the wider scheme will be agreed.

Announcing the interim arrangements yesterday, Steven Broomhead, chief executive of the NWDA, said: “I am pleased to be able to announce £15m of new VCLF funding today to help improve the finance options available to businesses in our region.

"A critical element of our finance portfolio is the new long- term Venture Capital and Loan Fund, which is currently in development. We know a lot of people are waiting to hear about this multi-million pound fund. It is taking longer than anticipated but we have now agreed, with Government, a way to progress the structure of this fund. And we are not alone – not one of the regional venture capital funds across England has yet been launched.

"We have been working hard behind the scenes to put in place additional transitional funding to make sure we have no gaps in finance for business here in the Northwest, and ensure we are ready for the up-turn in the economy.”

The new funding follows £10m of Transitional Loan funding announced by the NWDA in December, 2008. This is a total of £25m the NWDA and the European Regional Development Fund have made available to businesses.

Total funding consists of £15m from NWDA and £10m of funding from the ERDF Programme.

Funding will continue to be available to businesses with a viable business plan which demonstrate an ability to service the borrowing required, but which have been unable to obtain such funding from conventional commercial sources.

VCLF cash comes from a combination of loan, equity and mezzanine funding to support business growth. Loans range from £50,000 to £250,000, with Equity and Mezzanine finance available up to £2m.

The Northwest of England will receive a total of £521m ERDF cash between now and 2013.